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Updated over 8 years ago,

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6
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0
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Trent Vogelgesang
  • Boca Raton, FL
0
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6
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The first deal struggle

Trent Vogelgesang
  • Boca Raton, FL
Posted
Bigger Pockets Community, I've been listening to the BP podcasts for quite a while now, doing my own research and due diligence and have finally come up with a potential "deal". As a recent college graduate, my goal from this deal is to purchase a 3/2 or 4/2.5, live in the master and have roommates to help ease the monthly holding costs to try to live close to rent free. Now comes to the first piece of the puzzle to find a deal in which i can (1) afford to do so and (2) will provide the sufficient rent. I found a foreclosure through the MLS current listed at 245k and i researched the comps through my realtor and am confident the ARV is 285k. My rehab budget on the 2007, 4/2.5, townhome would be 15k for interior only(floors, appliances, TLC) as the exterior is covered by the HOA. I estimated my monthly holding costs at $1950 per month (mortgage payment, taxes, HOA, insurance). The comparable rent for this renovated home is $2150 (comps via MLS) which leaves only a small gap between the monthly holding costs. This gap would be to cover any additional vacancies(10%) leaving me on the hook for any additional interior repairs to the home but essentially all my holding costs would be covered. Would it make sense to purchase this home for myself to live and essentially pay rent to myself ($600-$1000/mo) and rent out the remaining bedrooms (2 or 3 x 600/mo) and use this to pay off the mortgage on the house? Or wait for a better deal that has a larger gap between the monthly holding costs and the rent in order to make some profit? Any advice would really be appreciated, thank you in advance.

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